Monday, 2 December 2013

Gold and Silver

I do not like to give too many opinions as regards the markets as they can have a habit of proving you wrong!. i prefer to trade what we are given.

However i have a real interest in THE REAL MONEY markets which are Gold and Silver not the idiotic PAPER CURRENCY markets. I watch people trying to trade the FX markets, you are wasting your time. That is because there is simply no driver in those markets, you are simply trying to pick out the least ugly if you want a LONG position. Or most ugly if you want a SHORT position, they are still all ugly paper currencies, and they are all being debased at a furious pace against the only true REAL MONEY which is Gold and Silver.

When they say that the price of Gold is going up, how can it? it is the same 1oz of Gold !!! what is happening is that the measuring unit of that 1oz of Gold the Dollar or any other paper currency is going down in value

Price inflation of gold = Deflation in the purchasing power of the paper currency measuring unit. It does not matter whether that is the Dollar or Euro or Pound or Yen or any other paper currency.

Have a look at a monthly chart of Gold and Silver and you can clearly see a long term trend line going back to the very start of this bull market in 2002/2003. you can also see the IN FORCE down trend line from April 2011. This is the trend line that is in force and dictating price action at the moment IT NEEDS TO BE RESPECTED. The Gold bugs can say whatever they like, but at the moment the price is trapped in a bear market and has been since 2011 that is a simple and undeniable fact

My thoughts are that, the down-trend line is about to collide with the long term up-trend line, The up-trend line defines the primary trend and is the most dominant. I believe that this line will hold, price will then be forced up through the down-trend line, which will be negated and the bull market resumes.

To conclude since April 2011 we have been in a bear market that i believe is contained within an ongoing bull market. I expect some time in 2014 a resumption of the Gold and Silver Bull Market.

At this time pessimism as regards the Gold and Silver markets will be at an extreme, there will be a lot of very afraid people.